[2025] FWC 2916
General information, not legal advice.
Fair Work Commission
2025-09-30
Original judgment source is linked above.
s.394 - Application for unfair dismissal remedy
Application for an unfair dismissal remedy - Compensation ordered - Application for costs
"[278] ... Instead of placing the blame squarely on the Applicant's shoulders it should have reflected on what actually went wrong, as identified in its own incident report concerning the incident, being a "lack of knowledge and experience", "lack of training/education on-site" and "lack of supervision", and considered the appropriate response in that context."
"In practical terms, a person may gain knowledge in the lead up to proceedings (when the opposing party's evidence is filed) or during the proceedings (e.g. after the cross examination of a crucial witness) which, when viewed objectively, would satisfy the test of the person's case having no reasonable prospects of success. In my opinion, It would be from that point that costs may be awarded, if the person did not take steps to recognise that their case was frivolous, untenable groundless or faulty. For an applicant, this may mean discontinuing the matter and for respondent it may mean making offers to settle a matter."
"[43] A reasonable person, who is a party to proceedings pursuant to s.170CE, when confronted with an offer of settlement from the other party, will determine whether, and if so, how to respond to such an offer after considering all the circumstances of the case, including:
[44] This list is not intended to be exhaustive. All of the circumstances are relevant and, as is made clear in the joint judgment in Blagojevch, there is no basis in the Act for giving primacy to any particular factor in every case".
"In a situation where an offer was made which was not fanciful and no counter offer was made by the opposing party to bring negotiations in the range the opposing party thought was reasonable, failure to make a counter offer could, depending on the circumstances, constitute acting unreasonably and failing to agree to terms of settlement".
"In practical terms, a person may gain knowledge in the lead up to proceedings (when the opposing party's evidence is filed) or during the proceedings (e.g. After the cross examination of a crucial witness) which, when viewed objectively, would satisfy the test of a person's case having no reasonable prospects of success. In my opinion, it would be from that point that costs may be awarded, if the person did not take steps to recognise that their case was frivolous, untenable, groundless or faulty. For an applicant, this may mean discontinuing the matter and for a respondent it may mean making offers to settle a matter."
"170. The FWC's power to award costs under this provision is discretionary and is only exercisable where the first party is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.
171. However, the power to award costs is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party".
"...our client offers to settle the entirety of his claim on the following terms:
"[7] The above offer is made in accordance with the principles in Calderbank v Calderbank 1975] 3 All ER 333...
[9] If the above offer is rejected or allowed to lapse by your client and your client does not achieve a better result at the final hearing, our client will:
a. Tender this letter on any application for costs; and
b. Seek an order that the respondent pay our clients costs of the proceedings from the date of this letter..."[30]
"2353. Subclause 611(1) provides that generally a person must bear their own costs in relation to a matter before FWA.
2354. However, subclause 611(2) provides an exception to this general rule in certain limited circumstances. FWA may order a person to bear some or all of the costs of another person where FWA is satisfied that the person made an application vexatiously or without reasonable cause or the application or response to an application had no reasonable prospects of success".
"[10] The concepts within s.611(2)(b) 'should have been reasonably apparent' and 'had no reasonable prospect of success' have been well traversed:
(1) A person must bear the person's own cost in relation to a matter before the Commission.
(2) However, the Commission may order a person (first person) to bear some or all of the costs of another person in relation to an application to the Commission if:
(a) the Commission is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) the Commission is satisfied that it should have been reasonably apparent to the first person that the first person's application, or the first person's response to the application, had no reasonable prospect of success.
(1) The Commission may make an order for costs against a party to a matter arising under Part 3-2 (the first party) for costs incurred by the other party to the matter if the Commission is satisfied that the first party caused those costs to be incurred because of an unreasonable act or omission of the first party in connection with the conduct or continuation of the matter.
(2) The Commission may make an order under subsection (1) only if the other party to the matter has applied for it in accordance with section 402.
(3) This section does not limit the commission's power to order costs under section 611.
Section 611(2)(a) - Is the Commission satisfied that Respondent responded to the application vexatiously?
"[40] As we have mentioned, the question of whether an application was made vexatiously turns on the motive of the applicant in making the application. Motive can be inferred from, among other things, the surrounding circumstances, the applicant's conduct and the merits of the application itself."
Section 611(2)(a) - Is the Commission satisfied that Respondent responded to the application without reasonable cause?
"It seems to me that one way of testing whether a proceeding is instituted "without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the preceding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being "without reasonable cause". But where, on the applicant's own version of the facts, it is clear the proceeding must fail, it may properly be said that the preceding lacks a reasonable cause."[49]
Section 611(2)(b) - Is the Commission satisfied that it should have been reasonably apparent to the Respondent that its response to the application has no reasonable prospect of success?
"[10] The concepts within s.611(2)(b) 'should have been reasonably apparent' and 'had no reasonable prospect of success' have been well traversed:
Section 400A(1) - Is the Commission satisfied the Respondent caused costs to be incurred by the Applicant because of an unreasonable act or omission of the Respondent in connection with the conduct or continuation of the matter?
"169. As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.
170. The FWC's power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.
171. However, the power to award costs is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party."

[10] Applicant's Reply Submissions at [15].
[12] Applicant's Submissions in Reply at [9] citing Department of Employment and Workplace Relations v Oakley [2005] AIRC 447 at [41].
[16] Applicant's Reply Submissions at [12].
[17] Applicant's Reply Submissions at [13].
[19] Respondent's Submissions at [5].
[20] Respondent's Submissions at [6], [10].
[21] Respondent's Submissions at [11].
[22] Respondent's Submissions at [12].
[24] Respondent's Submissions at [18].
[25] Respondent's Submissions at [15].
[26] Respondent's Submissions at [16].
[27] Respondent's Submissions at [17].
[28] Respondent's Submissions at [18].
[29] Applicant's Submissions in Reply at [3].
[30] Applicant's Submissions in Reply at [4].
[31] Applicant's Submissions in Reply at [5].
[32] Respondent's Submissions at [25].
[34] [2019] FWCFB 649 at [5].
[35] Respondent's Submissions at [29].
[36] Respondent's Submissions at [30].
[37] Respondent's Submissions at [30] citing as Baker v Salva Resources Pty Ltd [2011] FWAFB 4014.
[38] Respondent's Submissions at [31] citing Mr Haohan Qian v Grandmetro Constructions Pty Ltd [2025] FWC 737 at [259].
[39] Respondent's Submissions at [31] citing Mr Haohan Qian v Grandmetro Constructions Pty Ltd [2025] FWC 737at [246].
[40] Respondent's Submissions at [31] citing Mr Haohan Qian v Grandmetro Constructions Pty Ltd [2025] FWC 737at [308].
[41] Respondent's Submissions at [32].
[42] Respondent's Submissions at [26].
[43] Respondent's Submissions at [27].
[44] McKenzie v Meran Rise Pty Ltd [2000] AIRC 1118 at [7].
[45] [1997] IRCA 267; (1997) 76 IR 180, 181, citing Attorney-General v Wentworth (1988)14 NSWLR 481, 491.
[46] [1997] IRCA 267; (1997) 76 IR 180, 181.
[47] [2014] FWCFB 810 at [41].
[48] [1964] HCA 69; (1964) 112 CLR 125, 131.
[50] Church v Eastern Health t/as Eastern Health Great Health and Wellbeing [2014] FWCFB 810.
[52] [2014] FWCFB 810 at [27].
[53] [2014] FWCFB 810 at [30].
[54] See Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257, cited with approval in Church at [30
[55] Heidt v Chrysler Australia Limited (1976) 26 FLR 257 at [272 - 273]; Geneff v Peterson (1986) 19 IR 40 at [87-88]; Hatchett v Bowater Tutt Industries Pty Ltd [1991] FCA 188; (1991) 28 FCR 324 at 327; Re Ross and others, Ex Parte Crozier [2001] FCA 1665; (2001) 111 IR 282 at [12]; Re AustralianEducation Union (NT Branch) (No.2) [2011] FCA 728 at [30]. Also see Wright v Australian Customs Service, PR926115, 23 December 2002 per Giudice J, Williams SDP and Foggo Cand Church at [33].
[58] [2019] FWCFB 649 at [5].
Printed by authority of the Commonwealth Government Printer
Mr Haohan Qian
Grandmetro Constructions Pty Ltd [2025] FWC 2916
(1997) 76 IR 180
(1964) 112 CLR 125
(1992) 43 IR 257
(1976) 26 FLR 257
(1986) 19 IR 40
(1991) 28 FCR 324
(2001) 111 IR 282